Manufactured Housing Market Makes Strides
- Apr 08, 2019
The manufactured housing market had a big year in 2018. In its first-ever market report on the sector, NorthMarq analyzed occupancy, pricing and sales volume in manufactured housing and found that the segment has experienced 17 years of rent growth and a current 92.7 percent occupancy rate.
Transaction activity received a bump from the creation of Opportunity Zones within the 2017 tax law, while the supply of manufactured homes grew in response to increasing demand. Occupancy in manufactured housing rose 110 basis points from 2017 to 2018, the seventh year in a row of occupancy growth in the sector.
Rental pricing has experienced an even longer streak of consecutive growth, with prices rising every year since 2002, according to the report. In 2018, average rents increased 3.9 percent from the previous year, reaching $530 per month.
On the investment side, activity rose nearly 20 percent in 2018, as the median price rose to $33,900 per space, an 11.7 percent increase.
“Despite the consistent rent growth, which makes these assets attractive to investors, other housing options continue to become less affordable due to rising construction costs in traditional multifamily properties,” said Don Vedeen, vice president of NorthMarq’s National Manufactured Housing group, in prepared remarks. “Manufactured housing remains an appealing option for affordable housing investors given its consistency compared to the apartment sector.”